How to Calculate PayPal Fees: The Complete Guide for 2026

Stop guessing how much money will land in your bank account. Whether you are a freelancer, an eBay seller, or a small business owner, understanding PayPal transaction fees is crucial for maintaining your profit margins.

Our PayPal Fee Calculator above helps you instantly determine two things:

1. The Seller Fee: How much PayPal will deduct from an invoice.
2. The Reverse Calculation: Exactly how much you should invoice to receive a specific amount (Breakeven).

Current PayPal Fee Rates (Updated)

PayPal’s fee structure varies depending on where your client is located and the nature of the transaction. Here is the breakdown of the standard Merchant Rates:

Transaction Type	Percentage Rate	Fixed Fee (USD)
Standard Domestic (Goods & Services)	2.9%	$0.30
International (Cross-Border)	4.4%	Fixed Fee Varies
Non-Profit (Confirmed 501c3)	2.2%	$0.30
Micropayments (Under $10)	5.0%	$0.05

Note: International fixed fees vary by currency. For USD payments from abroad, the fixed fee usually remains $0.30, but the percentage jumps to 4.4%.

How the PayPal Formula Works

Many sellers make a common math mistake. If you want to receive $100, you cannot simply add 2.9% ($2.90) to the invoice. Why? Because PayPal calculates its fee on the total transaction amount, not the base amount.

The Standard Formula

To calculate the fee manually, use this equation:

(Transaction Amount × 0.029) + $0.30 = Total Fee

The “Reverse” Formula (Breakeven)

To figure out what to charge a client so that you pocket the full amount, the math is slightly more complex. This is the logic our calculator uses:

(Desired Amount + $0.30) ÷ (1 – 0.029) = Amount to Invoice

Example:
To receive exactly $500.00 in your account:

• You must invoice: $515.24
• PayPal Fee: -$15.24
• Net Total: $500.00

3 Tips to Reduce Your PayPal Fees

1. Invoice Less Frequently

Since PayPal charges a fixed fee ($0.30) on every single transaction, sending many small invoices eats into your profits.

• Scenario: sending ten $20 invoices costs you $3.00 in fixed fees.
• Solution: Sending one $200 invoice costs you only $0.30 in fixed fees.

2. Request “Friends and Family” (With Caution)

If you are receiving money from someone you know personally, they can select the “Friends and Family” option.

• Pros: There is usually no fee if funded by a bank account/balance.
• Cons: No Seller Protection. Do not use this for selling goods or business services, as PayPal may ban your account for fee evasion.

3. Account for Fees in Your Pricing Model

Don’t surprise clients with “extra charges” for PayPal fees at the last minute. Instead, use the Reverse Calculator above to build the fee into your project quote from the beginning. Presenting a flat fee of $515 looks more professional than asking for “$500 plus $15 for fees.”

Frequently Asked Questions (FAQ)

Does PayPal refund the fee if I issue a refund?

No. As of recent policy updates, PayPal does not return the fixed fee or percentage fee to the seller when you issue a refund to a buyer. You will cover that cost out of pocket.

How much is the PayPal fee for $100?

For a standard domestic US transaction:

• Total Fee: $3.20
• You Receive: $96.80

Are PayPal fees tax deductible?

Yes. For business owners and freelancers, transaction fees are a legitimate business expense. You can deduct the total amount of fees paid from your taxable income at the end of the year.

Is it illegal to ask clients to pay the PayPal fee?

It is not illegal, but it may violate PayPal’s User Agreement depending on your region. It is generally better practice to increase your product price to cover the cost rather than adding it as a “surcharge” at checkout.